LNG and Australia’s electricity consumption

Excluding Queensland’s LNG projects, electricity consumption in Australia’s National Electricity Market (NEM) is forecast to decline over the next three years.

Consumption decreases

The 2014 National Electricity Forecasting Report (NEFR) published by the Australian Energy Market Operator (AEMO) shows that excluding liquefied natural gas projects in Queensland, there is a 1.1% average annual decrease in overall NEM electricity consumption in the short term to 2016-17, reflecting a 3.0% average annual reduction in large industrial consumption.

The 2014 forecast compares to the average annual decline of 1.8% that occurred between 2009–10 and 2013–14, which was partially driven by sustained retail electricity price rises over the past five years, mainly due to network costs.

LNG projects

AEMO CEO, Matt Zema, explained: "Without Queensland’s LNG projects, in the short term we see electricity consumption continuing to decline.

"Queensland is the only NEM region with a sizeable forecast rise in consumption, with LNG projects ramping up gradually from next financial year which are contributing to annual average increases of 4.1% overall, and 16.4% for large industrial in that state.

"Without LNG, the otherwise flat outlook reflects the decline in energy-intensive industry - such as the Point Henry aluminium smelter closure in Victoria later this year - and the continuing influence of consumer behaviour on residential and commercial consumption."

Energy efficiency

Year-on-year increases in energy efficiency savings, attributed to increasingly efficient appliances, and building and industry regulations mainly driven by Federal Government initiatives, are also forecast over the outlook period to 2023-24.